Epley Corporation Makes a Product with the Following Standard Costs

question 199

Multiple Choice

Epley Corporation makes a product with the following standard costs: In July the company produced 3,300 units using 12,240 pounds of the direct material and 2,760 direct labor-hours. During the month, the company purchased 13,000 pounds of the direct material at a cost of $35,100. The actual direct labor cost was $51,612 and the actual variable overhead cost was $20,148. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
The labor rate variance for July is:

• A)$828 F
• B)$828 U
• C)$792 U
• D)$792 F

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Definitions:

Certain Income

A guaranteed or fixed amount of money received, not subject to variations or uncertainties.

Expected Utility

A concept in economics that represents the total utility an individual anticipates or expects to receive from a set of outcompeting choices under conditions of uncertainty.

Uncertainty

Refers to situations where the outcomes or future events are unknown, often affecting decision-making in economics and finance.

Expected Total Utility

The anticipated sum of satisfaction or happiness that an individual expects to receive from the consumption of goods or services.